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Tesco
Tesco plc (/tɛs.koʊ/) trading as Tesco, is a British multinational groceries and general merchandise retailer with headquarters in Welwyn Garden City, Hertfordshire, England, United Kingdom.3 It is the third-largest retailer in the world measured by gross revenues45 and ninth-largest retailer in the worldmeasured by revenues. It has shops in seven countries across Asia and Europe, and is the market leader of groceries in the UK (where it has a market share of around 28.4%), Ireland, Hungary6 and Thailand.78 Tesco was founded in 1919 by Jack Cohen as a group of market stalls.9 The Tesco name first appeared in 1924, after Cohen purchased a shipment of tea from T. E. Stockwell and combined those initials with the first two letters of his surname,10 and the first Tesco shop opened in 1931 in Burnt Oak, Barnet.111213 His business expanded rapidly, and by 1939 he had over 100 Tesco shops across the country.14 Originally a UK grocer, Tesco has expanded globally since the early 1990s, with operations in 11 other countries in the world. The company pulled out of the USA in 2013, but as of 2018continues to see growth elsewhere. Since the 1960s, Tesco has diversified into areas such as the retailing of books, clothing, electronics, furniture, toys, petrol, software, financial services, telecoms, and internet services. In the 1990s Tesco repositioned itself from being a down-market high-volume low-cost retailer, to one designed to attract a range of social groups by offering products ranging from low-cost "Tesco Value" items (launched 19939) to its "Tesco Finest" range. This broadening of its appeal was successful and saw the chain grow from 500 shops in the mid-1990s to 2,500 shops fifteen years later.15 Tesco is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index. It had a market capitalization of approximately £18.1 billion as of 22 April 2015, the 28th-largest of any company with a primary listing on the London Stock Exchange.16 Contents History Origins Jack Cohen, the son of Jewish migrants from Poland, founded Tesco in 1919 when he began to sell war-surplus groceries from a stall at Well Street Market, Hackney, in the East End of London.10 The Tesco brand first appeared in 1924. The name came about after Jack Cohen bought a shipment of tea from Thomas Edward Stockwell. He made new labels using the initials of the supplier's name (TES), and the first two letters of his surname (CO), forming the word TESCO.10 After experimenting with his first permanent indoor market stall at Tooting in November 1930, Jack Cohen opened the first Tesco shop in September 1931 at 54 Watling Street, Burnt Oak, Edgware, Middlesex.111213 Tesco was floated on the London Stock Exchange in 1947 as Tesco Stores (Holdings) Limited.10The first self-service shop opened in St Albans in 1956 (which remained operational until 2010 before relocating to larger premises on the same street, with a period as a Tesco Metro),17 and the first supermarket in Maldon in 1956.10 In 1961 Tesco Leicester made an appearance in the Guinness Book of Records as the largest shop in Europe.9 Expansion Tesco in Tiverton, Devonshowing the former logo During the 1950s and 1960s, Tesco grew organically, and also through acquisitions, until it owned more than 800 shops. The company purchased 70 Williamson's shops (1957), 200 Harrow Stores outlets (1959), 212 Irwinsshops (1960, beating Express Dairies' Premier Supermarkets to the deal), 97 Charles Phillips shops (1964) and the Victor Value chain (1968) (sold to Bejam in 1986).18 Jack Cohen's business motto was "pile it high and sell it cheap",19 to which he added an internal motto of "YCDBSOYA" (You Can't Do Business Sitting On Your Arse) which he used to motivate his sales force.19 A branch of Tesco in Crediton In May 1987, Tesco completed its hostile takeover of the Hillards chain of 40 supermarkets in the North of England for £220 million.20 In 1994, the company took over the supermarket chain William Low after fighting off Sainsbury's for control of the Dundee-based firm, which operated 57 shops. This paved the way for Tesco to expand its presence in Scotland, in which its presence was weaker than in England.21 Tesco introduced a loyalty card, branded 'Clubcard' in 1995, and later an Internet shopping service. In 1996 the typeface of the logo was changed to the current version with stripe reflections underneath, whilst the corporate font used for shop signage was changed from the familiar "typewriter" font that had been used since the 1970s. Overseas operations were introduced the same year.9 Terry Leahyassumed the role of Chief Executive on 21 February 1997, the appointment having been announced on 21 November 1995.2223 On 21 March 1997, Tesco announced the purchase of the retail arm of Associated British Foods, which consisted of the Quinnsworth, Stewarts and Crazy Prices chains in Ireland and Northern Ireland, and associated businesses, for £640 million.24 The deal was approved by the European Commission on 6 May 1997.25 The company was the subject of a letter bomb campaign lasting five months from August 2000 to February 2001 as a bomber calling himself "Sally" sent letter bombs to Tesco customers and demanded Clubcards modified to withdraw money from cash machines.26 Diversification The first self-service Tesco shop in St Albans, Hertfordshire. The shop has since relocated. Tesco in Tomaszów Mazowiecki, Poland The company started to expand the range of products it sold during the 1960s to include household goods and clothing under the Delamare brand, and in 1974 opened its first petrol station.272829 In Thailand, Tesco Lotus was a joint venture of the Charoen PokphandGroup and Tesco, but facing criticism over the growth of hypermarkets CP Group sold its Tesco Lotus shares in 2003. In late 2005 Tesco acquired the 21 remaining Safeway/BP shops after Morrisonsdissolved the Safeway/BP partnership.35 In mid-2006 Tesco purchased an 80% stake in Casino'sLeader Price supermarkets in Poland, which were then rebranded as small Tesco shops.36 On 9 February 2006, Tesco announced plans to move into the United States by opening a chain of small format groceries in the Western states (Arizona, California and Nevada) in 2007 named Fresh & Easy.37 In 2010, Tesco started funding a small film studio intended to produce Tesco exclusive direct-to-DVD films. The first film was released on 6 September called Paris Connections, based on a popular novel by Jackie Collins.3839 The lost years Tesco confirmed in April 2013 that it was pulling out of the US market (Fresh & Easy Stores), at a reported cost of £1.2 billion.40 In September 2013, Tesco announced that it would sell the business to Ronald Burkle's Yucaipa Companies for an undisclosed amount.41 In September 2013, Tesco launched its first tablet computer, a seven-inch model called Hudl.42 Tesco purchased the restaurant and cafe chain Giraffe in 2013 for £48.6 million.43 In 2014, it began to open restaurants within some of its shops. The company set up Tesco Family Dining Ltd in 2014 as part of a new department called 'new food experience', including Core Cafes, Giraffe, Decks and Euphorium bakeries. That year, Tesco reached an agreement to take the in-shop cafes run by Compass Group and Elior back under its own control, so as to improve its dining offering.44 On 1 September 2014, Dave Lewis, previously of Unilever, took over as CEO.45 In January 2015, Lewis announced plans to close the company's head office in Cheshunt and 43 loss-making shops in the near future, and the cancellation of 49 new large supermarket developments.46 The shop closures were expected to make 2,000 staff redundant, while a further £250 million of cost-cutting measures were planned.47 Tesco also confirmed the sale of its Blinkbox on-demand video service and its fixed-line telephone and broadband business to TalkTalk.48 Tesco sold the Blinkbox Music streaming service to Guvera on 26 January 2015,49 and confirmed it would close its Blinkbox Books service by the end of February 2015.50 In April 2016, Tesco confirmed the sale of 8.6% of its holding in Lazada Group, leaving it with an 8.3% stake. It was also reported to be seeking to sell Dobbies Garden Centres, Giraffe Restaurants and Harris + Hoole to concentrate on its main supermarket business.51 On 27 January 2017, it was announced that Tesco had reached an agreement to merge with Britain's biggest wholesaler Booker Group to create the UK's largest food group, there are however concerns over market dominance with Tesco being Britain's largest food retailer and Booker being the UK's largest wholesaler.52 It was announced in March 2017 that Trevor Masters, International Chief Executive, would be leaving in May after 38 years with the company. On 1 April, Tony Hoggett became Tesco's CEO for Asia, and Matt Simister became CEO for Central Europe.53 In April 2017, the company confirmed it would sell its in-shop opticians' business to Vision Express.54 In June 2017, Tesco announced a major cost-cutting initiative that would reduce the company's workforce by over 1,200 workers. Key reductions included over a quarter of its employees in Welwyn Garden City and Hatfield, and the closure of the call centre in Cardiff. The company hoped to reduce costs by £1.5 billion.55 In January 2019, Tesco announced another cost-cutting initiative that would close the food counters in 90 stores, affecting around 9,000 workers.56 UK operations As of 2017, Tesco's UK shop portfolio was as follows:57 Tesco Extra Tesco shop at Kingston Park, Newcastle upon Tyne Tesco Extra shops are larger, mainly out-of-town hypermarkets that stock nearly all of Tesco's product ranges, although some are in the heart of town centres and inner-city locations. The largest shop in England by floor space is Tesco Extra in Walkden, with 17,230 square metres (185,500 sq ft) of floorspace.58 In common with other towns, such as Warrington,59 the St Helens shop, which at 13,000 m2 (140,000 sq ft) is one of the biggest in England, was developed on the same site as the town's new rugby league stadium.60 Tesco Superstores Potters Bar Tesco Tesco Superstores are standard large supermarkets, stocking groceries and a much smaller range of non-food goods than Extra hypermarkets. The shops have always been branded as 'Tesco', but a new shop in Liverpool was the first to use the format brand 'Tesco Superstore' above the door.61 Tesco operates a number of in-shop cafes, but also began to introduce new restaurants in its shops from 2013 under the "Decks Carvery" brand.62 Tesco Express Tesco Express, Hilperton Road, Trowbridge, Wiltshire Tesco Express shops are neighbourhood convenience shops averaging 200 square metres (2,200 sq ft), stocking mainly food with an emphasis on higher-margin products such as sweets, crisps, chocolate, biscuits, fizzy drinks and processed food (due to small shop size, and the necessity to maximize revenue per square foot) alongside everyday essentials. They are located in busy city-centre districts, small shopping precincts in residential areas, small towns and villages, and on Esso petrol station forecourts. In 2010 it became known that Tesco was operating Express pricing, charging more in their Express branches than in their regular branches. A spokesperson said that this was "because of the difference in costs of running the smaller shops".63 Tesco Metro Tesco Metro shops are sized between Tesco superstores and Tesco Express shops, with shops averaging 1,000 square metres (11,000 sq ft). They are mainly located in city centres beside railway stations, the inner city and on the high streets of towns.64 One Stop One Stop, Trowbridge, Wiltshire One Stop, which includes some of the smallest shops (smaller than a Tesco Express), is the only Tesco shop format in the UK that does not include the word Tesco in its name. The brand, along with the original shops, formed part of the T&S Stores business but, unlike many that were converted to Tesco Express, these kept their old name. Subsequently, other shops bought by Tesco have been converted to the One Stop brand. Some have Tesco Personal Finance branded cash machines. The business has attracted some controversy, as the prices of groceries in these shops, often situated in more impoverished areas, can be higher than nearby Tesco branded shops, highlighted in The Times 22 March 2010: "Britain’s biggest supermarket uses its chain of 639 One Stop convenience shops–which many customers do not realise it owns–to charge up to 14 per cent more for goods than it does in Tesco-branded shops."65 Tesco responded to the article stating "It is a separate business within the Tesco Group, with its own supply chain and distribution network. One Stop shops offer a different range to Express shops and its operating costs are different. One Stop’s price strategy is to match to its nearest competitor, Costcutter, and is frequently cheaper."66 Tesco.com Dark Stores Since 2006 Tesco has operated a number of dark stores dedicated to the fulfilment of online orders of groceries:67 * Pick from store like operation: ** Croydon * Pick from store like operation with mechanised delivery marshalling: ** Aylesford ** Greenford * Combination of pick from store and zone picking operations with mechanised delivery marshalling: ** Enfield ** Crawley * Combination of pick from store, zone picking and goods to person operations with mechanised delivery marshalling: ** Erith Home shopping In the United Kingdom Tesco operates a home shopping service through the Tesco.com website. In May 1984, in Gateshead, England, Mrs. Jane Snowball used a piece of computer technology called "Videotex" on her television to purchase groceries from her local Tesco shop in the world's first recorded online shopping transaction from the home.686970 As of November 2006, Tesco was the only food retailer to make online shopping profitable.71 Tesco Clubcard Tesco launched its customer loyalty scheme, the Tesco Clubcard, in 1995. It has been cited as a pivotal development in Tesco's progress towards becoming the UK's largest supermarket chain and one that fundamentally changed the country's supermarket business.72 Tesco itself was cited in a Wall Street Journal article as using the intelligence from the Clubcard to thwart Wal-Mart's initiatives in the UK.73 Cardholders can collect one Clubcard point for every £1 (or one point for €1 in Ireland and Slovakia or 1 point for 1zł in Poland) they spend in a Tesco shop, or at Tesco.com, and 1 point per £2 on fuel (not in Slovakia). Customers can also collect points by paying with a Tesco Credit Card, or by using Tesco Mobile, Tesco Homephone, Tesco Broadband, selected Tesco Personal Finance products or through Clubcard partners, E.ON and Avis. Each point equates to 1p in shops when redeemed, or up to four times that value when used with Clubcard deals (offers for holidays, day trips, etc.) Clubcard points (UK & IE) can also be converted to Avios and Virgin Atlantic frequent flyer miles.74 Petrol stations A 24-hour Tesco petrol station Tesco first started selling petrol in 1974. Tesco sells 95, 97 and 99 RON (a fuel developed by Greenergy of which Tesco is a shareholder) petrol from forecourts at most Superstore and Extra locations. Tesco have recently diversified into biofuels, offering petrol-bioethanol and diesel-biodiesel blends instead of pure petrol and diesel at their petrol stations, and now offering Greenergy 100% biodiesel at many shops in the southeast of the United Kingdom. In 1998, Tesco and Esso (part of Exxonmobil) formed a business alliance that included several petrol filling stations on lease from Esso, with Tesco operating the attached shops under their Express format. In turn, Esso operates the forecourts and sells their fuel via the Tesco shop.75 As of 2013, there were 200 joint Tesco Express/Esso sites in the UK.76 Jack's Jack's supermarket in Chatteris, Cambridgeshire, the first store using this brand to open in September 2018. In 2018, Tesco launched a separate budget chain, Jack's, to compete with Lidl and Aldi; the first store opened in Chatteris, Cambridgeshire in September 2018.77 Subsidiaries Booker Group Tesco completed its acquisition of the food wholesaler Booker in March 2018. Booker also owns the Budgens, Londis, Euro Shopper and Premier Stores brands which operate under franchises.78 Tesco Bank In the United Kingdom Tesco offers financial services through Tesco Bank, formerly a 50:50 joint venture with The Royal Bank of Scotland. Products on offer include credit cards, loans, mortgages, savings accounts and several types of insurance, including car, home, life and travel. They are promoted by leaflets in Tesco's shops and through its website. The business made a profit of £130 million for the 52 weeks to 24 February 2007, of which Tesco's share was £66 million. This move towards the financial sector diversified the Tesco brand and provides opportunities for growth outside of the retailing sector. On 28 July 2008, Tesco announced that they would buy out the Royal Bank of Scotland's 50% stake in the company for £950 million.79 Telecoms